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Epicor Shares Popped: What You Need to Know

Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of software designer Epicor Software(Nasdaq: EPIC) jumped as much as 12% in intraday trading after agreeing to a $12.50-per-share buyout offer.

So what: Private equity firm Apax Partners is behind today's move, after agreeing to take Epicor private in a $780 million deal. Apax has signed up to buy both Epicor and Activant Solutions -- a privately held company currently owned by a private equity consortium -- and wants to combine the two under the Epicor name.

Now what: Shareholders representing 19% of Epicor's shares -- including Epicor's second largest shareholder, Elliott Management -- have already agreed to the deal. Epicor does, however, have a 30-day "go shop" clause that would allow it to drum up a better deal. In terms of potential competing bidders, Oracle(Nasdaq: ORCL) and SAP(NYSE: SAP) -- which would be primary competitors of the new, larger Epicor -- would have to be on the list. Other major software and services companies such as Microsoft(Nasdaq: MSFT) and IBM(NYSE: IBM) could also step in with a bid. While it may be worthwhile for current shareholders to stick around to see whether another bid emerges, investors on the sidelines may want to sit this one out.

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